Construction starts for built-to-rent (BTR) homes fell by four fifths in London last year amid gateway 2 delays and viability challenges, according to the British Property Federation (BPF).

In its analysis, carried out in partnership with Savills, the BPF revealed just 613 BTR homes began construction last year, marking an 80% drop on 2024 levels.

The BPF accredited much of the drop to Building Safety Regulator (BSR) delays and wider viability challenges within the sector.

While these pressures were most acute in the capital, they were also felt across the country, with BTR construction starts falling 37% in the regions, from 12,781 in 2024 to just 8,063 last year.

Despite the drop in construction starts, just over 67,300 BTR homes secured detailed planning consent last year, marking a 17% increase year on year.

This follows data published by residential researcher Molior last week, revealing private housing construction in the capital fell 84% between 2015 and 2025, with just 5,547 private home starts last year.

Recent data from Centre for Policy Studies also revealed housing starts across London totalled just 4,710 in the 2024-25 financial year, marking a 72% drop from 15,070 in 2023-24.

Danny Pinder, director of policy at the BPF, said changes made to the BSR in the latter half of last year were beginning to show “signs of having an encouraging impact on the speed of decision-making”.

“If 2025’s regulator delays can be eliminated in 2026, this should help remove one significant barrier to the delivery of new homes and alleviate some of the viability challenges developers are facing,” he added.

“Planning reform should also start to take shape in 2026, providing increased certainty around delivery and translating into an uptick in construction activity. Nevertheless, today’s statistics highlight the scale of difficulties facing the sector and the housing delivery pipeline as we head in to 2026.”

Guy Whittaker, head of UK BTR research at Savills, said: “While the fall in starts is stark, particularly in London, there are signs of resilience in the regional picture and in the growing pipeline of consented schemes.

“The priority now is to convert planning permissions into delivery. With housing firmly identified as a priority by the government and demand for rental homes continuing to outstrip supply, strengthening investor confidence and accelerating decision-making will be essential this year.”

Despite the drops, data published by the Ministry of Housing, Communities and Local Government earlier this month has revealed residential construction starts in England rose 18% in the 12 months to the end of September.